Singapore’s government confirms its mandate on higher productivity, skills development, and quality growth. The government has progressively raised levies and lowered Dependency Ratio Ceilings for less skilled foreign workers over the years. To employ higher quality foreign workers, the government has tightened the requirements for S Pass and Work Permit holders.
S Pass Quota and Levy Requirements
The number of S Pass and Work Permit holders a company can employ is capped at a quota. It refers to the maximum permitted ratio of foreign workers to the total workforce, a company is allowed to hire. The quota for service industry companies is 10% of the total headcount and 15% of the total headcount for remaining industries.
Foreign worker quota for a particular month is calculated using a three-month average of the number of local employees, excluding the current month and the previous month. Employers need to note that new and renewal applications will be rejected once the hiring quota is maximised.
Employers must also pay a foreign worker levy for all S Pass holders, which is segregated into Tier 1 and Tier 2. From 1st Sept 2023, the Tier 1 levy rate will be raised from the current S$450 to S$550. The Tier 2 levy rate remains the same at S$650.
A Long-Term Plan to Improve Productivity
The impact of the skilled labor shortage will be an important consideration in Singapore’s future economic policy while posing challenges for the country, which has become more global in outlook. Foreign labour policies have been adjusted to compel the construction and manufacturing sectors to become more productive.
Higher productivity is clearly the long-term agenda of the Singapore government. The benefits of hiring fewer and more highly skilled foreign workers will accrue over a period of time and boost productivity for all major sectors of the economy.
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